Why is bitcoin pumping when the economy is heading into a recession?

[South Park]

One of the reasons why Bitcoin was created is because of the inflation hedge, so in such a time like this when the economy is heading towards recession, investors will run for safety, and Bitcoin, Gold, and real estate stand to benefit; there will investors be running to invest their money. Bitcoin in the past has proven to be a store of value when you compare its performance over a couple of years with other Assets.

I don't really think Bitcoin was actually created to be a hedge against inflation because there wasn't inflation of this level at the time Bitcoin was created. It was created to be an alternative payment system and a store of wealth, but mainly to be a way for people to exchange finances without any central authorities, delays, and any kind of surveillance and stuff, though it is nowadays taken as an investment asset, it wasn't created to be like this.

Satoshi knew that Bitcoin and blockchain technology will either fail miserably or will gain significant success in the future, but I'm not really sure if he expected this much success for Bitcoin to conquer the whole world and become one of the most widely used investment opportunities in the globe.

What happens is that even if something is created with an intention people can always find other uses for it that its creator never imagined, fiat currencies are so out of control and governments are printing so much of them that people are looking for any way in which they can protect themselves, and bitcoin with its fixed maximum supply and its minting mechanism that it can let you know in advance how much of it will be around at any point in time are the perfect counter to inflation.

[Finestream]

One thing is for sure. Halving is near.
About the economy heading to recession is another thing I guess. If you have watched some Economics discussions, some of the experts are saying that this recession is a planned recession since Covid. If so then all these layoffs, bankruptcies, and company shutting down is part of the plan.

I'm not an expert on economics but when Blackrock applied for BTC spot ETF, many of its counterparts are also applying for BTC ETF which it is speculated that BTC will also pump up.

Exactly. Halving is fast approaching and bitcoin will definitely be in its best shape regardless of the down economy we have at the present. And take note that bitcoin will never be affected by the factors affecting fiat and the government’s economy. Though at some point, it makes the price of bitcoin to suddenly decline but rest assured that it will only be temporary and it will always surge high when the time is right.

[Woodie]

I thought the last bull run would be the last we would have seen of bitcoin ever reaching those heights so I stopped looking at the crypto space ever since.

Why do you say "Last bull run" ?? Bitcoin isn't going anywhere mate, fyi cryptocurrencies are just getting started!!

And for as long as not everyone has internet access in some parts of the world, tells you technology that includes crypto still have room for growth so let's not give up just yet..the journey just got started!!

But now we have discussions about dethroning the dollar and CBDCs,

Nobody is dethroning anything here!

Let's factor in the fact that we are comparing two different things here, like say an orange 🍊  vs a tomato 🍅  these are running two different races!!!
So comparing bitcoin to fiat doesn't fit the profile as they are compliments to each other and not substitutes so expect these to coexist!

I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

Bitcoin doesn't have a direct bearing of what our economies do and will flourish even in tough times because it's relying on the basics of supply and demand and this case demand that has been growing as crypto keeps becoming popular world over!

[Kasabus]

Forgive my ignorance, I am very new to this space. I saw talks about CBDCs and that drew my attention back to cryptocurrencies. I thought the last bull run would be the last we would have seen of bitcoin ever reaching those heights so I stopped looking at the crypto space ever since. But now we have discussions about dethroning the dollar and CBDCs, I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

This is the sign that bitcoin halving is already on its way. Know that halving will put bitcoin into its best version of it so what we see and experience now is actually its good effect. And the current recession cannot even stop bitcoin from pumping as bitcoin has never been backed and supported by the government. So whatever the fate of fiat and our economy, bitcoin will always have a different path to take.

[Wend]

One thing is for sure. Halving is near.
About the economy heading to recession is another thing I guess. If you have watched some Economics discussions, some of the experts are saying that this recession is a planned recession since Covid. If so then all these layoffs, bankruptcies, and company shutting down is part of the plan.

I'm not an expert on economics but when Blackrock applied for BTC spot ETF, many of its counterparts are also applying for BTC ETF which it is speculated that BTC will also pump up.

Exactly. Halving is fast approaching and bitcoin will definitely be in its best shape regardless of the down economy we have at the present. And take note that bitcoin will never be affected by the factors affecting fiat and the government’s economy. Though at some point, it makes the price of bitcoin to suddenly decline but rest assured that it will only be temporary and it will always surge high when the time is right.

Are you sure bitcoin won't be affected by fiat or economy factors? So why was bitcoin severely dumped when inflation peaked, and the war between Russia and Ukraine caused an economic crisis? Bitcoin is part of this world, part of the economy, it has no value without any connection to our world. Bitcoin's price movements are the result of economic influences.

[STT]

Easiest thing to point out here this whole dynamic isnt new at all, its part of the trend for the last half century.   We do have high inflation and interest rates have also been raised, higher then they were prior near zero for a long time but none of that stops the fact that inflation is still higher then the basic interest rate.    The losses in the dollar remain ongoing, they havent been halted they continue at some pace.  We might be losing at a slower rate per month the value of the dollar but its still negative losses.
  BTC gains are quite modest, its mostly revising prior price action and will keep repeating that process while we clear up old volume of market orders and those involved in 2022 or earlier but have been left with some open trades they wish to close.  It takes time, the idea we'll go straight up is unlikely and we are fortunate that its correct time is taken to revise all pricing properly.

[icalical]

I don't think Bitcoin is pumping right now, it just had a little bounce, and now is going sideways again. Tho I really hope Bitcoin will start pumping soon since halving is s about less than 1 year from now. Other thing about your question, I don't think 'dethroning' USD has anything to do with Bitcoin and Crypto, it's just some country no longer using USD for bilateral trade, they prefer to use their own currency.

[SamReomo]

Forgive my ignorance, I am very new to this space. I saw talks about CBDCs and that drew my attention back to cryptocurrencies. I thought the last bull run would be the last we would have seen of bitcoin ever reaching those heights so I stopped looking at the crypto space ever since. But now we have discussions about dethroning the dollar and CBDCs, I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

There isn't going to be any recession in the world because inflation rates are getting better in many countries and that's why those people who are talking about inflation are mostly promoting it to create fear in the minds of the people. The CBDCs wont impact the price of Bitcoin as they will be a separate class of crypto-currencies and there impact will be minimum to none on Bitcoin or on crypto-market.

The Bitcoin isn't pumping because a pump would rise its price above all time high with any issue, but if we look carefully into the Bitcoin then we can be sure that it's slowly recovering from the dump it has faced due to some low class crypto-currencies and exchanges that were having poor class concepts and fraudulent activity. The Bitcoin's price has been slowly recovering from its low levels and it will be better in future.

I'm quite sure that in 2024's halving event would make Bitcoin cross the mark of $70k price range without any doubt and then the things will be once again good in the crypto space. The market will see a huge bull run this time and I'm very sure that investors will be highly attracted to crypto market this time. I'm also expecting that Bitcoin may reach price levels of $120k to $150k during 2024-2025, and if that happens then you'll see the boom in crypto market.

[tjtonmoy]

Bitcoin has proven many times in the past that it is the most resilient against economic crisis and inflation. Many see it as an asset that is called "Digital Gold". Having a limited supply makes Bitcoin a perfect weapon to fight against the inflation problem. Also, big companies are showing more interest in Bitcoin recently. They are using Bitcoin as an investment strategy to grow their share value.

Maybe it will make no sense right now. But that does not matter here. If you are a believer, then keep on hodling. The next halving is coming soon. That will also bring a positive vibe to the market soon. So ignore all these small details and look at the bigger picture. The bulls will be back again.

[Unbunplease]

Bitcoin has proven many times in the past that it is the most resilient against economic crisis and inflation. Many see it as an asset that is called "Digital Gold". Having a limited supply makes Bitcoin a perfect weapon to fight against the inflation problem. Also, big companies are showing more interest in Bitcoin recently. They are using Bitcoin as an investment strategy to grow their share value.

Maybe it will make no sense right now. But that does not matter here. If you are a believer, then keep on hodling. The next halving is coming soon. That will also bring a positive vibe to the market soon. So ignore all these small details and look at the bigger picture. The bulls will be back again.

When a country is in a recession, money depreciates rapidly. Therefore, people start looking for relatively safe and highly liquid assets. Bitcoin is versatile, it does not depend on government laws, and it can be bought and sold off-exchange. Here are some factors that contribute to the rise in the price of bitcoin 

[disconnectme]

I think most people here do like to be a prophet of doom, it is not written in stone that economy is heading to recession, I suspect we will likely see a change in economic policy this quarter, the election is fast approaching and you won't want to be a president that drives the economy to recession because what are you going to campaign with. The free money is coming soon, this would have started but they need to try to bring the inflation down first which is the main concern the FED has for now

[Russlenat]

Forgive my ignorance, I am very new to this space. I saw talks about CBDCs and that drew my attention back to cryptocurrencies. I thought the last bull run would be the last we would have seen of bitcoin ever reaching those heights so I stopped looking at the crypto space ever since. But now we have discussions about dethroning the dollar and CBDCs, I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

You can’t expect that while economic recession is going on, bitcoin price will follow. That’s certainly a wrong mindset. Bitcoin is never controlled by the government or the country’s economy, so whatever happened to them, bitcoin will always stick to its cycle and will definitely reach a higher value not only because halving is near, but because bitcoin is destined to grow and increase its value overtime, and not that it will permanently dropping its price just like with some altcoins that eventually turn dead coins.

[nurilham]

I don't think Bitcoin is pumping right now, it just had a little bounce, and now is going sideways again. Tho I really hope Bitcoin will start pumping soon since halving is s about less than 1 year from now. Other thing about your question, I don't think 'dethroning' USD has anything to do with Bitcoin and Crypto, -snip-

Yesterday, Bitcoin almost reached $32k. I think it is quite good bounce, Bitcoin can increase from $30k to $31k. However, I agree that it was still a little increase, we expect bigger increase for Bitcoin price. Sure, halving should become the reason for Bitcoin to increase significantly, but the big increase probably happens after the halving. If we learn the previous bullrun, the significant increase will be in 2025.

I agree that Bitcoin price growth has no correlation with the USD or the economic situation. We still remember that even if we were in the pandemic in 2021, but Bitcoin still can create its ATH. So, the bullrun probably happens although we may experience a recession.

[teosanru]

Forgive my ignorance, I am very new to this space. I saw talks about CBDCs and that drew my attention back to cryptocurrencies. I thought the last bull run would be the last we would have seen of bitcoin ever reaching those heights so I stopped looking at the crypto space ever since. But now we have discussions about dethroning the dollar and CBDCs, I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

In an ideal scenario bitcoin will always go up if the traditional markets show dumps because dumps are signs of low confidence in market which means people are putting money somewhere else which can be bitcoin. But honestly we have seen some times bitcoin is trending very same as the stock market only. Like in covid 2020 Feb mar market fell like there is no tomorrow and so did the stock market but eventually it raised up like it'll achieve it's all old targets easily.

[Captain Corporate]

People basically wants to save their money in a secure location, that's it. I mean during recession keeping it at stocks makes no sense because companies will make less profit, or even maybe no profit at all, so buying stocks makes no sense, buying gold rarely makes sense but that could be done truth be told, keeping it at fiat makes definitely no sense neither, the returns are terrible and no matter how high or low inflation is its still there so you lose value. All in all during recession bitcoin is one of the best things to hold and right now we could hold it as much as we want to, and wait for the storm to pass as well. That could work if the bitcoin price goes up before and after halving as well, that would actually work very well.

[jasonjm]

If you are anticipating a bull run is about to start, you might be wrong. If the economy is going into recession, investors always look for alternate investment opportunities, and the possibility is that investors might have been interested in Bitcoin. Another reason is that whales are seeking exit liquidity to sell their bucket. The market is rallying to lure in more retail investors.

[yhiaali3]

The rise of Bitcoin during this difficult economic situation has many factors. There is a sure relationship between the economic situation and Bitcoin. Inflation is the main reason why people turn towards gold and Bitcoin.

Bitcoin has proven itself to be a successful investment in the long run, a good store of value, and a means of hedging against inflation, so we often find people resorting to buying bitcoin when the value of fiat decreases to preserve the value of their assets.

We also see now the tendency of major companies to invest in bitcoin, which enhances people's confidence in bitcoin as a store of value and a successful investment in the long term.

[irhact]

All in all during recession bitcoin is one of the best things to hold and right now we could hold it as much as we want to, and wait for the storm to pass as well. That could work if the bitcoin price goes up before and after halving as well, that would actually work very well.

Bitcoin can't hold strong during recession, in recession everything will be affected starting from cryptocurrency to other businesses. Fiat currency are the best thing to hold during recession as they don't lose value and when the recession is over you can use your fiat currency to buy assets such as Bitcoin and other valuable assets. Holding Bitcoin during recession isn't a bad idea but if you're holding it thinking it won't lose value like other things, that won't happen.

During recession there's FUD in the market and fud is the reason Bitcoin dumps because investors are uncertain how the market will react to the recession and investors would want to secure their wealth by holding stablecoin, after the recession Bitcoin will recover quickly.

[KingsDen]

Why is bitcoin pumping when the economy is heading into a recession?

The economy of every country mostly the third world countries are heading to recession and they have been in this lane of recession for so long and I can say that are used to it and that is why it doesn't affect their investment ability.
Bitcoin is known largely for resisting inflation but most times it has been proven that bitcoin is very sensitive to the happenings in the economy.
For pumping when then economy is not fine should be attributed to the halving rumour and halving that is approaching. Halving has the ability to form a fundamental that will defy the current economic arrangement.

[Minecache]

The rise of Bitcoin during this difficult economic situation has many factors. There is a sure relationship between the economic situation and Bitcoin. Inflation is the main reason why people turn towards gold and Bitcoin.

Bitcoin has proven itself to be a successful investment in the long run, a good store of value, and a means of hedging against inflation, so we often find people resorting to buying bitcoin when the value of fiat decreases to preserve the value of their assets.

We also see now the tendency of major companies to invest in bitcoin, which enhances people's confidence in bitcoin as a store of value and a successful investment in the long term.

Firstly, I don't see bitcoin being pumped as the economic situation gets tougher, the world economy falls into crisis when inflation peaks in 2022, and bitcoin gets dumped more severely than pumped. Second: bitcoin also failed to fulfill its role of hedge against inflation as inflation rose, bitcoin and other assets suffered while the DXY index consistently hit new ATHs last year.

Although bitcoin has recovered from $17,000 to $31,000 and other financial markets have also recovered, it is because inflation has eased, the economy is past its worst, and we are on the way to recovery. From what I see, bitcoin is just a speculation like many other assets, it is not yet a store of value, or a safe haven, as many people say.